A Conversation With: Barry Melancon - Intacct and Cloud Computing for AICPA members

AccountingWEB's managing editor, Gail Perry, spoke with AICPA President and CEO, Barry Melancon, at the AICPA Practitioner's Symposium in Las Vegas last month. In this part of the interview, Melancon discussed Cloud Computing, the AICPA's new partnership with Intacct, and the Software as a Service opportunities the AICPA is making available to its members.

GP: Regarding Intacct and your relationship - how is that going to affect the AICPA and its membership?

BM: I think what really affects the membership is the cloud computing in general, Intacct is a manifestation of it, in a certain area. We have Bill.com, in effect Paychex is a cloud computing type of environment, it's a little bit different, it was maybe first generation, but our concept with CPA2biz was to build this suite of services that were high quality, that were leading edge, that CPAs, particularly small firm CPAs, could be comfortable bringing to their clients, and the CPA stayed in the sort of relationship as the key trusted advisor, which we believe the CPA is.

That was the whole premise of what we were trying to do, and obviously it didn't take a rocket scientist to come up with the notion that general ledger needed to be part of that. But we didn't jump at general ledger solutions since C2B's inception until now, because we wanted to make sure it was right and it was something that was not what could be obtained throughout the sources. The whole notion was, we can bring the mass of the profession together in building a model that works whereas, the small firm sitting on their own couldn't do that.

Now obviously software as a service, cloud computing, whatever you want to label it, has a lot of built-in efficiencies and advantages for the small firm and the small business client. I think it's here to stay. It's proven itself in the marketplace. You take these millions of small businesses that don't necessarily have staff on payroll that they can invest in, they turn to the CPA as a trusted advisor. This allows the collaborative work in a shared way, and you eliminate the need for version updates and all those types of things at the small businesses office. General ledger is a pretty significant part of tax compliance, accounting compliance, etc., so we think it will build very rapidly.

We think it is good timing because businesses are looking at cost containment and control, and the other thing is that from a small business perspective, which is one of the things we truly believe in here, is that a small business is only going to be able to access this service through a CPA relationship which is again the sweet spot of what we envisioned when we created CPA2biz. Mid-size businesses, if they have CPAs on staff, could access [Intacct] directly, but a small business is not going to have that and so Intacct isn't going to provide that service to that small business unless they dial in or they connect if you will through the CPA relationship, which of course is what the AICPA is about, making sure that CPA relationship is strong.

GP: So is Intacct going to be only working thru CPA2biz now?

BM: At the high end, we like to say, it's for CPAs by CPAs. When we bring the services out, we have advisory groups and feedback mechanisms from the firms that are using it, that feedback gets put in, whether it's Paychex or Bill.com or Intacct. We provide that feedback, we get modifications, we have triage, or corrections if there are things that need to be improved. All of those types of things are an advantage we bring by bringing that group together. At the upper end there are some large applications of Intacct that can be done directly. But if you look at the smaller business, which is millions [of businesses], it's through the CPA; that's part of the agreement that we entered into with Intacct, to say, "You will contribute this at the smaller size end only through CPAs," because we don't the CPA disintermediated from the process.

GP: Since Microsoft is a financial partner in CPA2biz, how does their product, their office accounting product, play into the relationship with Intacct?

BM: Well we did a full market search, we went through several years of exploration and investigation when we first launched C2B. Microsoft was building [an accounting] product, they subsequently chose not to build that, then they acquired Great Plains, but even though they're an owner, we went through the process and picked what we think is the best answer for the profession.

GP: Do you see this as an opportunity to build membership in the AICPA, or enhance the participation of the membership that's already there? It seems like this makes you a more active player among your constituency.

BM: If you look at what we offer now in C2B, there are more than 20,000 firms accessing those services. If you look at for instance our insurance program which doesn't have anything to do with CPA2Biz, there are some 25,000 firms that access those services. We have a long history of when we do things that there is a pretty deep utilization, and that does create value as member. Everything we do, from advocacy in Washington to programs such as we're talking about, obviously reinforces the notion that being a member of the AICPA is a very important thing.

And we work at creating value. We create value for our members and we deploy resources, in this case non-dues resources, to service the membership, and that's the mission of CPA2Biz.

GP: It strikes me that the timing is perfect - a silver lining go to the bad economy. This is a way that businesses can improve their services and lower their costs at the same time.

BM: Lower their costs, probably lower their fees that the client has to pay, it takes some of the hassles out of it, and it's a fairly easy conversion, it's not something that requires a big investment to do. I think you're absolutely right. And I wish I could say that when we started down this path several years ago we were smart enough to be able to align all this timing, but I would much rather a much stronger economy and us not be exactly as timed as it looks, but I do agree with you that it's pretty good timing from that standpoint. We've had great response from firms, larger firms as well - top 50 firms that see this as a comprehensive offering to their small business clients - and I think all firms ought to take a look at it. It's not going to be right for everybody, there are other alternatives in the marketplace, but clearly this is one that has been designed to protect the CPA in that particular process.